Questions tagged [currency]
a generally accepted form of money, including coins and paper notes , which is issued by a government and circulated within an economy.
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What's a "relative pair trade" for currencies?
Is the U.S. Dollar About to Crash? – Pairagraph
The way I see currencies is that they are a relative pair trade. Against gold, with its stability characteristics, I don't like the US dollar. But ...
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Is Currency Devaluation a cause or effect of interest rates?
I understand that Federal bank/Goverment can manipulate the currency market and devalue its currency by printing more money or buying foreign currencies/assets (essentially increasing the supply of ...
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In today's money, what was the value of a 1492 Spanish maravedí?
Satava (2007) estimates that the costs of Columbus's 1492 voyage was 1,765,734 maravedís.
In today's money, what was the value of a 1492 Spanish maravedí?
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Why would China's FX reserves stay flat as the Fed ramps up its balance sheet?
As seen in the chart, China's FX reserves have remained flat lately despite the massive balance sheet expansion of the Fed. Though out of the temporal domain of this chart, if it were extended back to ...
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How exactly does QE affect the value of the USD?
A lot of people on the Internet refer to quantitative easing (QE) as a form of "legal money printing" when it is actually not. As such, many of these folks would thus erroneously say that QE leads to ...
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What is the effect on GDP when foreigners buy lots of domestic bonds?
I am trying to figure out the effect on GDP of foreigners buying lots of domestic bonds. From what I understand, when foreigners buy lots of domestic bonds:
They need to convert their foreign ...
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How does the Monetary base, Narrow money and Broad money affect inflation?
In a lot of countries (e.g. Hungary) the M0, M1, M2 and M3 all doubled, tripled or even quadrupled in the past 10 years. How does this directly affect inflation?
Since just because M2 doubles, it ...
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What are the benefits of reducing zeroes from currency (eg: Iran)?
Recently, Iran decided to replace its old currency to a new one.
Quoted from Wikipedia
A proposal has been agreed to by the Iranian parliament to drop four zeros, by replacing the rial with a new ...
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Does inflation/expected inflation in a given country devalue its currency or increase its value?
I've seen both arguments. From my understanding an increase in the rate of inflation should decrease the value of the currency since it's by definition a depreciation in its purchasing power. But I've ...
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How to interpret correctly the uncovered interest rate parity condition
So, according to my macroeconomics professor's notes, the UNCOVERED INTEREST RATE PARITY CONDITION is defined this way :
Now, i don't quite grasp the concept of the 'expected appreciation rate of ...
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Why would oil suppliers choose a lower priced contract?
The West Texas Intermediate (WTI) futures contract has ranged from \$6 to \$20 in the last 48 hours. The May Shanghai International futures contract is 205 Yuan (CNY). At 7 CNY per USD, that comes ...
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If a fluctuating cryptocurrency becomes the new world coin, would it stop fluctuating?
An often mentioned criterium for money is that it should be a unit of account. It could be argued that cryptocurrencies don't satisfy this requirement.
The argument is that businesses like bakers ...
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What did Jevons mean by this quote?
Jevons (1875):
Currency is to the science of economy what the squaring of the circle is to geometry, or perpetual motion to mechanics.
I can't make any sense of this quote. I know that the "...
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Why does a loose Fed policy reduce the downward pressure on the currencies of emerging markets?
To start off, my background is not in economics but in Computer Science. I recently read in the Economist that a looser Fed policy removes downward pressure on the currencies of emerging markets.
Is ...
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Math based proof for currency changes
This isn't part of my homework but I am genuinely interested in the mathematical proof behind this question (this is my line of work currently). I tried to work through it but after 2 hours gave up. ...
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Is fiat currency better than a backed-currency?
My question is would it be better if we went back to something like a gold standard but backed by a finite virtual material instead? It avoids the problem of fluctuations in gold supply. The money-...
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Who owns money?
Bishop Nicole Oresme (1320-1382), in the first monetary treatise, wrote:
CHAPTER VI: Who owns the Money? (Cuius sit ipsa moneta?)
Although it is the duty of the prince to put his stamp on the money ...
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US dollar the "Safe Haven"
Could anyone give me a detailed description on how the US dollar serves as the "safe haven" of assets when there are market stresses?
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Relationship between government expenditure and exchange rate?
I've read an increase in government expenditure can lead to increase the chances of currency crisis but shouldn't it lead to the opposite?
Fiscal deficit ----> Govt will undertake borrowings --->...
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Whats the meaning of this parameter?
I was looking the currency exchange board, and I saw the value of "exotic" for the parameter Group, what is the meaning of this value?
I dont know if this is a local figure or is used in ...
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What are some currencies that are not pegged and fixed?
Are there any currencies that are not pegged to the dollar or euro and are purely fixed exchange rates?
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Why did foreigners keep buying Swiss francs at -41% (not a typo) interest rate in the 1970s?
A Bloomberg (opinion) piece notes
In January 1975, the Swiss government held an emergency meeting and then took the extraordinary step of slapping a 41% annual penalty on foreign deposits. But even ...
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What is the difference between microeconomics money and macroeconomics money?
In microeconomics, \$USD are a store of value. I can sell a candy bar for \$1, and I can hang onto that \$1 for a year and then buy the same candy bar for that same \$1. If I print \$1 (and get away ...
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why is the term fiat money or fiat currency and is it the same as legal tender or are there any differences?
I learnt some very basic economics learning about 2, 2.5 decades back. Recently, while reading some article on the web, I came to know about 'fiat money' and 'fiat currency' but have been unable to ...
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How is an spontaneous currency changing phenomenon called?
On November 2019 I went back to Venezuela, and the biggest shock for me was that people started trading goods using US Dollars. This isn't "legal", but it has become so common that I hardly ever had ...
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Data for currency crises
Dear StackExchange users,
I am currently studying currency crises and for that I need data from 1980-2018. I have used data from IMF, OECD, BIS, WORLD BANK, etc., but I still have some missing data ...
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What faction determines the strength of a state's currency and can that faction be rebelled?
I know that to determine the strength of a state's currency (a currency's Equilibrium Price), the following factors are contemplated by some faction, but I don't know what is that faction.
...
user24868
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What does 'currency convertibility' mean?
As a student with almost zero background in economics, I've been struggling to comprehend the notion of the currency convertibility. Most of the definitons I've found online talk about the ease with ...
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Measuring economic growth in GDP (in USD) vs Real GDP (domestic currency)
I've noticed that a lot of data online seems to measure a non-US country in USD. This seems odd to me, because doesn't that mean that US fiscal/monetary policies, politics, and economics would affect ...
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What strategies can the president employ to deflate the dollar
United States president Donald Trump has publicly declared a desire to deflate the value of the dollar. I have read in news reports that he has asked aids to find ways to decrease the dollar's ...
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How does the Federal Reserve reduce "excess reserves"?
Over the last few years, the amount of currency is circulation (and the corresponding liability on the Fed's balance sheet) has been growing; however, the asset side of the BS hasn't increased. By ...
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Calculating the amount paid for a loan in today's dollars
So I was trying to figure out the amount paid for a loan in today's dollars using two different methods but they give me different results. I was hoping that someone could explain which method is ...
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Consequences of removing hard currency [closed]
If an appropriate electronic system were implemented governments would know how much money there is in circulation, who has it and if some illegal transaction has been done.
This measure could help ...
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Dealing with Missing Values in Diff-in-Diff Estimation
To preface this, I am asking this question on the Econ SE because I was made aware on Cross Validated that Difference in Difference estimation is quite an economics specific method.
The picture above ...
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Currency Devaluation - As a Means of Paying Off Debt
From https://www.sapling.com/8117368/debt-handled-currency-devaluation:
Currency devaluation will not only affect consumer debts, but it will affect how a country pays back its national debt. If a ...
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What happens if a country omits the zeros of it's current money?
I mean, for example, the government changes all x10000 to x1; where x equals to currency of the respected country (Dollar, for instance).
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Why exchange rates of national currency are usually stable, where as cryptocurrency like bitcoin and ethereum is highly volatile?
Exchange rate of national currency like US dollar or INR don't fluctuate much during a month or year, but the exchange rate of cryptocurrency like bitcoin is highly volatile even in a single day. What ...
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Effect of interest rates on currencies
I always understood that high interest rates in country A attract investors and cause the currency to appreciate. However, the interest rate parity theory suggests that high interest rates weaken a ...
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How does key currency work?
When a country make too many of their currencies, it will eventually lower the currencies' value and inflation would occur.
But why won't key currency work like this? If the US is making more and ...
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Why does a weaker currency make sovereign debt cheaper?
Investopedia tells me that a weaker currency will reduce sovereign debt burdens. It is quoted as saying 'a weaker currency makes [these] payments effectively less expensive over time.' However, I ...
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Facebook's Libra - Why would it vary in value
Facebook has come up Libra its version of crypto-currency.
The unique feature of Libra is the "reserve" which backs Libra. The reserve is supposed to be held in stable global currencies (USD, GBP, ...
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Purchasing power of currency abroad
Say you have two countries A and B. Suppose we have a situation where country A's currency can purchase much more in country B than the other way round. What causes this phenomenen?
Is it possible ...
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Are currencies equilibrating?
I was travelling recently and realised that dollars, euros, British pounds and Swiss francs all have more or less the same worth (i.e. 1 dollar $\cong $1 pound $\cong$ 1 euro $\cong $ 1 chf). This was ...
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How is seigniorage redistributed in the Eurozone?
An ECB page notes that:
As euro banknotes travel freely across borders, at any one time the number of banknotes in circulation registered at each national central bank can vary enormously. The ...
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Value of Currency Itself
What is the value of an individual piece of currency itself based on the efficiencies it allows in trade, in contrast to the value it represents?
For example, people often talk (complain) about the ...
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Can inflation occur in a positive-sum game currency system such as the Stack Exchange reputation system?
As most active users of this site know, the way the reputation system works is that everyone starts out with 1 reputation and a user can earn more reputation by asking good questions and writing ...
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"Increasing trade barriers causes a country’s currency to appreciate"?
Mishkin (2016, p. 476) writes:
Barriers to free trade such as tariffs (taxes on imported goods) and quotas (restrictions on the quantity of foreign goods that can be imported) can affect the ...
user14083
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Commonly used indicators for currency pair strength?
I am attempting to write a program in Python that monitors a single currency pair, GPB/NZD to be specific. My main focus will be to run constant calculations every 2 to 3 minutes in order to give ...
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Soros shorting the pound
How did Soros make money by shorting the pound? When he sold the pound and made its price to decrease, he had to buy it back again to return the amount he borrowed, but doesn't buying the pound raise ...
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Is an EU single currency still a trade advantage in 2019?
When the single currency was planned, there was no internet and there all currency exchange was manual.
Today the web can automatically convert prices using multiplication of the numbers in the ...
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